Loretta Napoleoni’s most recent Italian book, Il Contagio, takes a penetrating look at the new global economic protest movement. Published in Italy in September by Rizzoli and #4 on the Italian bestseller list.

Q: You live in both the U.S. and Europe. How do you see each dealing with economic crisis?
A: In the U.S., even though there is a recession and people are very disillusioned about politics, there is an underlying optimism. Europeans are by nature pessimistic: they moan all the time. So there is this constant complaining about politicians, about the economy. And there is very little action.

Q: Is there Chinese medicine for a healthier Western economy?
A: Pragmatism. Forget ideology, and use whatever works. We’re in a huge crisis and still defending the economic model that brought us there. We’re afraid to re-think. We don’t turn to the policy of (John Maynard) Keynes (who believed in government spending to create jobs) because we think it’s socialism. If that’s what it takes to get through the crisis, why not? The Chinese used capitalism to save their country, and it worked very well. We should take that lesson of pragmatism from them.

“Capi-communism, a hybrid system in which a communist economy becomes capitalist by introducing into the equation a profit motive, is emerging as the most recent and modern version of capitalism. But it would be wrong to look at the last three decades of reform in China as a separate model from the one studied by the Classical economists. Deng did not reform capitalism, he adapted communism to it. Western capitalism should not look at China as something foreign but as an evolved version mutant of itself. This could help us to isolate our mistakes by using as a benchmark the success of Chinese economic innovation.”

“The revolutionary contagion has finally reached the US. Occupy Wall Street, the civil society movement following on from the protest movements of Arab and European youth, is challenging the financial, economic and political oligarchic elites who over the last twenty years have hijacked true democracy in the US — and everywhere else.”

“The hidden interdependency between terrorism and the global economy goes well beyond the credit crunch, the recession and the crisis of the euro. Since 9/11 it has been extending the boundaries of a shadow world that threatens to replace our own if we do not break away from the legacy of the war on terror. Bringing the troops home is not enough; we need to focus on the true target of this war, on the lifeline of terrorism: We need to focus on the money.”

“In the 1990s, when I interviewed the Red Brigades for my PhD, I began to uncover new paradigm in terrorist networks. Behind the dramatic facade of politics and violence loomed the more mundane problems of funding an organization whose costs ran to several million dollars per year. As I got to know the leaders of Italy’s largest armed groups, I found that their primary skills were managerial, not military. It was thanks to their business acumen more than their martial prowess that they had risen to the top ranks of the operation.”

“The Soviet Union crumbled when the economic and political model upon which it rested became obsolete; the Kremlin failed to modernize and the ill-fated war in Afghanistan exposed this failure. Moscow should never have gotten involved. Now Washington risks doing the same if it limits its modernization merely to the election of Barack Obama, the first black President, who campaigned on the promise of change. What is needed is a fresh, new approach to bringing peace and prosperity to countries fundamentally different from our own.”

“On the 1st of September, Ghaddafi and Berlusconi will together watch the acrobatic aerial performance of the best Italian pilots, celebrating themselves, two men who have successfully fooled their own people and the international community with the discreet charm of modern dictatorship.”

“While America and is fully focused on the new leadership and totally preoccupied with the credit crunch, Israel goes to war. The silence of the new president – dictated, according to his transition team, by rigid protocol – and the absence of a firm and committed call for a cease-fire from the past president confirm that the timing of this conflict is perfect.”

“America has elected Barack Obama president and the entire planet is jubilant. People’s hopes are high because this man promises change, a major departure from the policies of Bush neo-conservatives. Will Obama succeed in turning the clock back, will he bring America and the world back to the euphoric time of early globalization?”

“The US elections will go down in history for many reasons: black candidate, female vice presidential candidate and an economic climate similar to that of the time of The Great Gatsby. But the similarities with the Jazz Age — as F. Scott Fitzgerald defined the 1920’s — does not refer to the great Crash of ’29, which ended those years, but rather to the disturbing impoverishment of the middle class in favour of the rich. This is a phenomenon which, during the eight years of the Bush presidency, has assumed identical dimensions to that of the ’20’s.”

“The collapse of Carlyle Capital and the temporary rescue of Bear Stearns may go down in history as the key events signaling the end of the ‘roaring nineties’ (which lasted into the 21st century), nearly two decades of easy money, cheap credit and soaring global debt. Exceptional events — such as the Fed for the first time in 50 years throwing a monetary lifeline to a bank on the verge of bankruptcy — constitute the choreography of the closing scenes of this financial catastrophe which so much resembles a modern-day Greek tragedy.”

“Globalized high finance has been shaken by yet another scandal. Société Générale (SocGen), the second-largest French bank, is in serious trouble due to the wild speculative transactions of rogue trader Jerome Kerviel. But this weekend in Tokyo, the ministers of finance and central bankers of the G7 will discuss another matter. Behind SocGen’s colossal loss of 4.5 billion euros ($7 billion) there is another, much more serious crisis that the Kerviel affair has made it possible to hide. In mid-January, SocGen wrote off 2 billion euros of bad debt linked to the American subprime crisis. This phenomenal loss went unreported in the media because all eyes were focused on the French rogue trader.”

“In the run-up to the war in Iraq, the United States government needed to prove a link between Saddam Hussein and al Qaeda. Their link was Abu Musab al-Zarqawi, a marginal jihadist who, thanks in large part to the U.S. misinformation machine, became one of the worlds deadliest terrorists.”

“The longer Hamas governs against America’s support and Israel economic ostracism, the stronger its claim to power will be. Financially, it can last for at least 6 months, if not longer. The eyes of the entire world are focused on the next move and Hamas’s leadership knows that, and this is why it has chosen Ismail Haniya, a moderate, pragmatic politician, as its prime minister. The message it is sending to the world is clear and simple: democracy brought us here and it is with the ballot not with the bullet that we shall rule. For once, the West should stop shouting and listen instead.”